The Australian Taxation Office is closely examining work-related clothing and laundry expense claims of taxpayers submitting their 2017-18 tax returns.
The ATO says that clothing claims are up nearly 20% over the last five years with people either making mistakes or deliberately over-claiming. Common mistakes include people claiming ineligible clothing, claiming for something without having spent the money, and not being able to explain the basis for how the claim was calculated.
“Around a quarter of all clothing and laundry claims were exactly $150, which is the threshold that requires taxpayers to keep detailed records. We are concerned that some taxpayers think they are entitled to claim $150 as a ‘standard deduction’ or a ‘safe amount’, even if they don’t meet the clothing and laundry requirements,” Assistant Commissioner Kath Anderson said.
While this particular announcement focuses on clothing related expenses, it has been clear for some time now that the ATO is paying very
close attention to work related expenses in general. All claims should be supported by evidence – just in case the ATO decides your claim
requires closer scrutiny. We have heard of a number of real life examples in the last year or so where the ATO has queried and challenged
very small deduction amounts which could not be supported by appropriate evidence.
What can I claim?
You can only claim a deduction for the cost of buying and cleaning:
- Occupation-specific clothing. For example, the checked pants a chef wears.
- Protective clothing such as fire-resistant and sun protection clothing, safety-coloured vests, non-slip nurse’s shoes, rubber boots for concreters, steel-capped boota, gloves, overalls, heavy duty shirts and trousers, smocks and aprons worn to protect everyday clothing during income-earning activities.
- Unique, distinctive uniforms, clothes that are designed and made for the employer and not publically available, such as shirts with the company logo.
If you claim $150 on clothing and laundry expenses, just be aware that you might be asked to prove these expenses.
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